Child Home Purchase Tax Credit

Baukindergeld - Baukindergeld was a government subsidy for families with children purchasing their first owner-occupied home. It was paid out by KfW as a non-repayable grant. The program expired on March 31, 2021, and applications are no longer being accepted. Subsidies that have already been approved will continue through 2031.

Review: Terms and Conditions

The Baukindergeld (KfW 424) provided 1,200 euros per child per year over ten years - a total of 12,000 euros per child. Eligible were families with at least one child under the age of 18 and a taxable household income of no more than 90,000 euros (plus 15,000 euros for each additional child). A total of approximately 310,000 applications were approved; payments for approved cases will continue through 2031.

The Baukindergeld applied to the first purchase of an owner-occupied property-that is, for families buying or building their first home. It could be applied for both new construction and existing properties. The subsidy cap was based on household income, not on the property value-this meant that families in expensive metropolitan areas such as Nuremberg or Munich could also benefit, provided their income did not exceed the limit.

Total subsidy by number of children:

Number of children	Annual subsidy	Total subsidy (10 years)
1 child	€1,200	€12,000
2 children	€2,400	€24,000
3 children	€3,600	€36,000
4 children	€4,800	€48,000

Successor Programs and Current Funding

Since the expiration of the Baukindergeld, the federal government and Bavaria have launched various alternative programs that, while not fully replacing the Baukindergeld, offer attractive funding when combined:

KfW “Home Ownership for Families” Program (KfW 300): Low-interest loans of up to €270,000 for climate-friendly new construction (Efficiency House 40). The program is specifically aimed at families with children and is limited to new construction. Those who build an Efficiency House 40 receive a repayment subsidy of up to 170,000 euros.

Bavarian Homeownership Allowance: A one-time grant of 10,000 euros for families purchasing their first owner-occupied home, plus a 1,500-euro child bonus per child. The grants are non-repayable.

Housing Construction Bonus: For home savers with a taxable income of up to 35,000 euros (70,000 euros for married couples), 10% of the annual savings contribution is paid as a bonus, up to 700 euros (1,400 euros for married couples) per year.

Employee Savings Allowance: Anyone who pays capital-forming benefits into a home savings contract receives, subject to certain income limits, a government allowance of 9% up to a maximum of 470 euros annually.

Housing Riester (§ 10a EStG): Riester allowances and tax benefits can be used to build equity or repay a home loan. The basic allowance is 175 euros annually, plus an additional 185 euros for each child (300 euros for children born after 2007).

Families in Nuremberg: Combining the Programs

For a single-family home in Nuremberg with a purchase price of 500,000 euros (KfW Efficiency House 40, 2 children):

• KfW 300 repayment subsidy: up to 146,000 euros
• Bavarian Home Ownership Allowance: 10,000 + 3,000 euros (2 children)
• Wohn-Riester over 10 years: approx. 7,000-10,000 euros in subsidies
• Total subsidy package: potentially over 160,000 euros in subsidies

Practical Tip for Families in Nuremberg

We recommend that families in the Nuremberg metropolitan region seek comprehensive subsidy counseling before purchasing real estate. Combining various programs-the Bavarian Homeownership Grant, KfW funding for Efficiency House 40, and building savings subsidies-can significantly reduce the financial burden. Especially in Nuremberg, where purchase prices for single-family homes range between 400,000 and 600,000 euros, every euro in subsidies makes a difference.

Important: Most programs must be applied for before the purchase or the start of construction-submitting an application retroactively is generally not possible. For personalized advice, contact KfW, L-Bank Bayern, or a local savings bank (Sparkasse Nürnberg, Volksbank Raiffeisenbank Bayern Mitte)-they have an overview of all programs and can provide a tailored subsidy recommendation.

Frequently Asked Questions

Can I still apply for the Baukindergeld?

No, the program closed on March 31, 2021. Only families who had received a notarized purchase agreement or a building permit by March 31, 2021, and who submitted their application within six months of moving in were eligible to apply. Applications that have already been approved will continue to be paid out for the full ten-year term-until 2031 at the latest. If you are unsure whether a Baukindergeld application has been approved for your property, you can check the status with KfW.

What alternatives are currently available?

The KfW program “Home Ownership for Families” (KfW 300) is the most direct successor program for new construction meeting the Efficiency House 40 standard-with significantly higher funding opportunities than the old Baukindergeld, but also stricter energy efficiency requirements. For the purchase of existing homes, the Bavarian Homeownership Allowance offers an attractive one-time grant. In addition, KfW funding for energy-efficient renovations (BEG), tax deductibility under Section 35c of the Income Tax Act (EStG) for owner-occupiers, and municipal programs offered by the City of Nuremberg may be applicable. We recommend a personal consultation, as the optimal combination of programs varies depending on the individual case.

Does the Baukindergeld have to be repaid?

No, it is a non-repayable grant. However, KfW may reclaim a portion of the funds if the property is sold, rented out, or no longer used as a primary residence within the ten-year subsidy period. Anyone who moves within the subsidy period and rents out the house must report this to KfW immediately. The clawback is calculated on a pro-rata basis for the remaining subsidy years-if you cease to use the property as a primary residence after five years, this would amount to five annual installments of 1,200 euros per child. Relocations for caregiving purposes or job-related transfers may trigger special provisions-in this case, please contact KfW directly.

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